A staggering 71% of companies report manual data entry and incompetent Accounts Payable (AP) processes as crucial pain points.
While it's only one element of the entire ‘Procure-to-Pay’ (P2P) process, Accounts Payable remains a vital one. Errors, duplicate invoices, unmatched purchase orders etc, not only waste time and valuable resources but, these inefficiencies can impact an organisation’s bottom line due to inaccurate payments.
Ineffective Accounts Payable processes can also weaken supplier relationships. Supplier and trade partners are essential to an organisation’s daily execution and delivery, dependent as they are on their supplier network for much needed goods and services.
A typical Accounts Payable process involves the capturing of invoices, assigning it to the relevant cost centre and matching against purchase orders, approval, and payment. Accounts Payable Automation automates this entire process – resulting in a faster, more accurate, easier, and seamless operation.
Simply put, Accounts Payable Automation (APIA), is the automation of an organisation’s entire inbound invoice process (irrespective of invoice or financial transaction volumes). Its essential function – to extract data from an invoice and map it into the ERP system of choice. This incorporates information such as purchase amounts, quantities, and vendor names. Invoices are then forwarded to the correct recipients for review and approval.
It eliminates unnecessary backlogs and the propensity for human error and optimises a company’s DPO (days payable outstanding). It guarantees that each invoice is delivered and managed on time – building trust and increasing supplier confidence and leading to an effective, efficient, and seamless Accounts Payable process that is more cost effective and with quicker turnaround times.
Further, integration into existing ERP and/ or accounting systems provides access to real-time, accurate and holistic financial data.
Getting it Right!
- The right technology is key. Your chosen APIA solution needs to allow for:
- Seamless integration with your existing Accounts Payable process.
- Improved inbound invoice traceability and auditability.
- Security and performance compatibility.
- Easy addition of workflows to your current AP process and
- Easy connection for your suppliers to submit their invoices and follow their status.
Too many companies are still using OCR (optical character recognition) to capture inbound invoice data. Although it has improved, this technology has consistently shown a lack of accuracy.
The right solution can also help supplier ease of use – providing multiple ways for them to submit their respective invoices in the preferred format, thereby further strengthening supplier relationships.
It should also not require any change to existing Accounts Payable technology or processes. The use of SaaS (Software as a Service) technologies, together with certified ERP connectors and API (Application Programming Interface – a software intermediary that allows two applications to talk to each other), makes it possible to integrate directly into existing Accounts Payable processes, delivering inbound invoices directly into your APIA system.
Security is Key!
Login authentication and document encryption to secure business document interchanges is essential. Further, action taken on an inbound invoice must be registered and stored. This ensures traceability and paves the way for an audit trail. Additionally, every inbound invoice – valid or invalid, carries embedded metadata. This data can be used within an Accounts Payable workflow and even sent back to your ERP or business system where your employees can easily find important information.
Organisations are increasingly turning to automation and digitisation of processes to improve business processes. APIA is no different and can often be the catalyst for the further entrenchment of digital processes with an organisation’s entirety. APIA brings with it not only the opportunity to free up one’s Accounts Payable resources to focus on high-value activities due to efficient and effective automated processes. Critically, it guarantees complete Accounts Payable data integrity and improves transparency for better supplier engagement and management.
Contributed article by Symtrax